Commissioner of the Environment and Sustainable Development

Transcription

1 2011 Report of the Commissioner of the Environment and Sustainable Development DECEMBER Chapter 3 Enforcing the Canadian Environmental Protection Act, 1999 Office of the Auditor General of Canada

2 The December 2011 Report of the Commissioner of the Environment and Sustainable Development comprises The Commissioner s Perspective, Main Points Chapters 1 to 5, an appendix, and six chapters. The main table of contents for the Report is found at the end of this publication. The Report is available on our website at For copies of the Report or other Office of the Auditor General publications, contact Office of the Auditor General of Canada 240 Sparks Street, Stop 1047D Ottawa, Ontario K1A 0G6 Telephone: , ext. 5000, or Fax: Hearing impaired only TTY: distribution@oag-bvg.gc.ca Ce document est également publié en français. Her Majesty the Queen in Right of Canada, represented by the Minister of Public Works and Government Services, Cat. No. FA1-2/ E-PDF ISBN ISSN

3 Chapter Enforcing the Canadian Environmental Protection Act, 1999

4 Performance audit reports This report presents the results of a performance audit conducted by the Office of the Auditor General of Canada under the authority of the Auditor General Act. A performance audit is an independent, objective, and systematic assessment of how well government is managing its activities, responsibilities, and resources. Audit topics are selected based on their significance. While the Office may comment on policy implementation in a performance audit, it does not comment on the merits of a policy. Performance audits are planned, performed, and reported in accordance with professional auditing standards and Office policies. They are conducted by qualified auditors who establish audit objectives and criteria for the assessment of performance; gather the evidence necessary to assess performance against the criteria; report both positive and negative findings; conclude against the established audit objectives; and make recommendations for improvement when there are significant differences between criteria and assessed performance. Performance audits contribute to a public service that is ethical and effective and a government that is accountable to Parliament and Canadians.

5 Table of Contents Main Points 1 Introduction 3 The Canadian Environmental Protection Act, Environment Canada s enforcement program 5 Previous audits 6 Focus of the audit 8 Observations and Recommendations 9 Risk-based planning 9 The Environmental Enforcement Directorate uses a methodical, risk-based approach to identify enforcement priorities 10 The Environmental Enforcement Directorate lacks key information to identify risks 11 Lack of training and laboratory testing methods limit enforcement 15 Enforcing the Act 17 Fair, predictable, and consistent enforcement of the Act is not assured 17 Additional resources have not resulted in more enforcement activity 19 Measuring performance 20 The Environmental Enforcement Directorate does not measure its results 20 Improving performance 22 Key challenges have not been addressed 22 Conclusion 25 About the Department s response 26 About the Audit 28 Appendix List of recommendations 31 Report of the Commissioner of the Environment and Sustainable Development December 2011 Chapter 3 iii

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7 Enforcing the Canadian Environmental Protection Act, 1999 Main Points What we examined Why it s important The Canadian Environmental Protection Act, 1999 (CEPA 1999) is Canada s principal federal environmental statute. It is intended to protect the environment and human health by mitigating and managing risks posed by harmful substances. CEPA 1999 and its regulations govern a variety of environmental matters, including toxic substances, cross-border air and water pollution, and waste disposal. The Act also imposes requirements for pollution prevention planning and emergency plans, and it regulates the interprovincial and international movement of hazardous wastes and recyclable materials. Environment Canada s enforcement program is aimed at ensuring that individuals, companies, and government agencies comply with the pollution prevention and conservation goals of environmental and wildlife protection Acts and regulations, including CEPA The enforcement of CEPA 1999 is carried out by the Department s Environmental Enforcement Directorate, comprising a national office and five regional offices across Canada whose activities include monitoring and enforcing regulatory compliance. We examined whether Environment Canada s enforcement program was well managed to adequately enforce compliance with CEPA We assessed whether the Department has applied a risk-based approach to plan its enforcement activities and target the greatest threats to human health and the environment; enforced the law in a fair, predictable, and consistent way, as the Act requires; measured the results of its enforcement activities; and acted on identified opportunities for improvement. Audit work for this chapter was completed on 11 October CEPA 1999 states that the protection of the environment is essential to the well-being of Canadians and that the primary purpose of the Act is to contribute to sustainable development through pollution prevention. According to Environment Canada, environmental laws alone are not enough to guarantee a cleaner, better environment. These laws also need to be enforced. Enforcing CEPA 1999 is therefore an important part of protecting the health of Canadians, biodiversity, and the quality of Canada s air, soil, and water. Report of the Commissioner of the Environment and Sustainable Development December 2011 Chapter 3 1

8 According to Environment Canada, enforcement of the law can encourage behavioural changes needed to protect the environment and human health by preventing and managing risks posed by toxic and other harmful substances. What we found The enforcement program has not been well managed to adequately enforce compliance with the Canadian Environmental Protection Act, 1999 and ensure that threats to Canadians and their environment from pollution are minimized. The Environmental Enforcement Directorate lacks key information on regulated individuals, companies, and government agencies to know whether it is targeting its enforcement activities toward the highest-risk violators or the highest risks to human health and the environment, as called for by Environment Canada s own environmental enforcement policy. The Department s enforcement actions are limited by gaps in its capacity to enforce CEPA regulations. Many of the factors it considers in setting priorities for enforcement have nothing to do with risks to human health or the environment or with the past record of compliance of those regulated. Instead, some regulations are excluded from being priorities due to lack of adequate training for enforcement officers or lack of adequate laboratory testing to verify compliance. The Environmental Enforcement Directorate failed to follow up on half of its enforcement actions during the audit period to verify that violators returned to compliance with CEPA regulations. In addition, often it did not apply key management controls to ensure that enforcement officers applied the Act in a fair, predictable, and consistent manner across the country, as called for by the Act. The Department has been slow to act on significant shortcomings that continue to impede successful enforcement, such as inadequate gathering and analysis of information to inform enforcement planning and targeting, and inadequate training of enforcement officers. Furthermore, Environment Canada is not measuring the results of its enforcement activities and actions and does not know whether they have achieved the program objectives of encouraging compliance and minimizing damages and threats to the environment. The Department has responded. Environment Canada agrees with our recommendations and has provided responses. However, it disagrees with our findings and conclusions. We elaborate on the disagreement at the end of the Conclusion section of this chapter. Information contained in the Department s responses to our audit recommendations contradicts our audit evidence. The Department was not able to provide evidence to support the representations made in its responses. 2 Chapter 3 Report of the Commissioner of the Environment and Sustainable Development December 2011

9 Introduction 3.1 The health of Canadians and Canada s long-term economic competitiveness are linked to the quality of the natural environment. Environmental laws and regulations are intended to protect air, soil, and water quality; biodiversity; and public health by controlling the discharge of pollutants into the environment. These laws also restrict the use of certain substances and set limits on the quantity or concentration of substances allowed to be used, released to the environment, or contained in a product. To do so, however, they must be effectively enforced. 3.2 Successful enforcement will ensure that regulated individuals, companies, and government agencies act in a way that achieves the objectives of environmental regulations. By creating negative consequences for violations of the law, enforcement deters illegal conduct. Deterrence is further strengthened when potential violators determine that those consequences penalties such as fines and jail time outweigh the potential benefits of non-compliance. The Canadian Environmental Protection Act, The Minister of the Environment is responsible for the administration of a number of environmental statutes, including the Canadian Environmental Protection Act, 1999 (CEPA 1999). CEPA 1999 is the federal government s principal environmental statute. The Act is intended to protect the environment and human health by preventing and managing risks posed by toxic and other harmful substances. It regulates the management of risks associated with these substances including cross-border air and water pollution and the interprovincial and international movement of hazardous wastes and recyclable materials through measures such as concentration limits, permits, pollution prevention plans, and environmental emergency plans. Exhibit 3.1 lists the regulations under CEPA Report of the Commissioner of the Environment and Sustainable Development December 2011 Chapter 3 3

10 Exhibit 3.1 Canadian Environmental Protection Act, 1999 Regulations 1. 2-Butoxyethanol Regulations 2. Asbestos Mines and Mills Release Regulations 3. Benzene in Gasoline Regulations 4. Chlor-Alkali Mercury Release Regulations 5. Chromium Electroplating, Chromium Anodizing and Reverse Etching Regulations 6. Contaminated Fuel Regulations 7. Disposal at Sea Regulations 8. Environmental Emergency Regulations 9. Export and Import of Hazardous Waste and Hazardous Recyclable Material Regulations 10. Export Control List Notification Regulations 11. Export of Substances Under the Rotterdam Convention Regulations 12. Federal Halocarbon Regulations, Federal Mobile PCB Treatment and Destruction Regulations 14. Fuels Information Regulations, No Gasoline and Gasoline Blend Dispensing Flow Rate Regulations 16. Gasoline Regulations 17. Interprovincial Movement of Hazardous Waste Regulations 18. Marine Spark-Ignition Engine, Vessel and Off-Road Recreational Vehicle Emission Regulations 19. Masked Name Regulations 20. New Substances Fees Regulations 21. New Substances Notification Regulations (Chemicals and Polymers) 22. New Substances Notification Regulations (Organisms) 23. Off-Road Compression-Ignition Engine Emission Regulations 24. Off-Road Small Spark-Ignition Engine Emission Regulations 25. On-Road Vehicle and Engine Emission Regulations 26. Ozone-depleting Substances Regulations, Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations 28. PCB Regulations 29. PCB Waste Export Regulations, Perfluorooctane Sulfonate and its Salts and Certain Other Compounds Regulations 31. Persistence and Bioaccumulation Regulations 32. Phosphorus Concentration Regulations 33. Polybrominated Diphenyl Ethers Regulations 34. Prohibition of Certain Toxic Substances Regulations, Pulp and Paper Mill Defoamer and Wood Chip Regulations 36. Pulp and Paper Mill Effluent Chlorinated Dioxins and Furans Regulations 37. Regulations Adding Perfluorooctane Sulfonate and Its Salts to the Virtual Elimination List 38. Regulations Prescribing Circumstances for Granting Waivers Pursuant to Section 147 of the Act 39. Regulations Respecting Applications for Permits for Disposal at Sea 40. Release and Environmental Emergency Notification Regulations 41. Renewable Fuels Regulations 42. Rules of Procedure for Boards of Review 43. Secondary Lead Smelter Release Regulations 44. Solvent Degreasing Regulations 45. Storage Tank Systems for Petroleum Products and Allied Petroleum Products Regulations 46. Sulphur in Diesel Fuel Regulations 47. Sulphur in Gasoline Regulations 48. Tetrachloroethylene (Use in Dry Cleaning and Reporting Requirements) Regulations 49. Tributyltetradecylphosphonium Chloride (TTPC) Regulations 50. Vinyl Chloride Release Regulations, Virtual Elimination List 52. Volatile Organic Compound (VOC) Concentration Limits for Architectural Coatings Regulations 53. Volatile Organic Compound (VOC) Concentration Limits for Automotive Refinishing Products Regulations 4 Chapter 3 Report of the Commissioner of the Environment and Sustainable Development December 2011

11 Environment Canada s enforcement program 3.4 The goal of Environment Canada s enforcement program is to ensure that damages and threats to the natural environment, its ecosystems, and biodiversity are minimized through the enforcement of legislation administered by Environment Canada for the benefit of all Canadians and the international community. The enforcement program aims to ensure that individuals, companies, and government agencies comply with the pollution prevention and conservation goals of environmental and wildlife protection acts and regulations. 3.5 In 1998, a parliamentary review of the Canadian Environmental Protection Act concluded that Canadians [were] not getting the high level of environmental protection that they expect and deserve, and that a number of problems were precluding effective enforcement, including a lack of both human and financial resources. Environment Canada made significant organizational changes to its enforcement program in 2005, establishing an independent Environmental Enforcement Directorate managed nationally under a Chief Enforcement Officer who reports directly to the Deputy Head of the Department. The Directorate consists of a national head office and five regional offices. Each region is tasked with carrying out the Directorate s National Enforcement Plan. The Directorate is responsible for enforcing CEPA 1999 as well as the Fisheries Act. 3.6 In 2007, the government stated that it would bolster the protection of water and land through tougher environmental enforcement that would make polluters accountable. The government increased Environment Canada s funding to hire new enforcement officers, increase enforcement activity, and reinforce support functions, such as training, intelligence, and information management. Since 2007, the Department s environmental enforcement budget has increased by $3.4 million and 40 full-time-equivalent positions. 3.7 In the fiscal year, the Environmental Enforcement Directorate had 214 full-time-equivalent staff, and total spending was $20 million for enforcing CEPA 1999 and the Fisheries Act. This figure represents approximately 2 percent of Environment Canada s planned spending. Environment Canada officials estimated that approximately 60 percent of the Directorate s inspection resources are assigned to enforce CEPA regulations, while the remaining 40 percent of inspection resources are assigned to enforce the Fisheries Act. Report of the Commissioner of the Environment and Sustainable Development December 2011 Chapter 3 5

12 3.8 A range of activities contributes to compliance with the Act, including drafting regulations that are enforceable, promoting compliance, and enforcing compliance with regulations. 3.9 The enforceability of a regulation depends on a number of factors, including clear language and definitions, adequate training of enforcement officers, and the availability of analytical methods and laboratory tests to detect compliance Promoting compliance involves encouraging conformity with the law through information and education programs to increase awareness and understanding of the law and its regulations. Enforcing compliance involves inspections; investigations of violations; enforcement actions to compel compliance without resorting to formal court action, such as warnings, tickets, and environmental protection compliance orders; and court actions such as injunctions, prosecution, court orders upon conviction, and civil suits for the recovery of costs Exhibit 3.2 presents the number and types of enforcement actions taken under CEPA 1999 in Environment Canada s Compliance and Enforcement Policy for CEPA 1999 defines compliance as the state of conformity with the law. Both the Act and the policy stipulate that enforcement officers throughout Canada will apply the Act in a manner that is fair, predictable, and consistent. The policy also states that the desired result of enforcement actions is compliance with the Act within the shortest possible time and with no further violation. Previous audits 3.13 As noted earlier, in addition to CEPA 1999, the Environmental Enforcement Directorate is responsible for enforcing the pollution prevention provision of the Fisheries Act. In 2009, we audited Environment Canada s enforcement of the Fisheries Act (Spring 2009 Report of the Commissioner of the Environment and Sustainable Development, Chapter 1 Protecting Fish Habitat) We found that Environment Canada actively administered two of the six Fisheries Act regulations for which it had responsibility. The remaining four regulations, which dated to the 1970s, were not actively administered. We also found that the Department did not use 6 Chapter 3 Report of the Commissioner of the Environment and Sustainable Development December 2011

13 a risk-based approach to identify, assess, and address risks associated with non-compliance with the Fisheries Act that could lead to significant harm to fish habitat In our 2008 audit of air emissions, we looked at Environment Canada s enforcement of three fuels regulations under CEPA 1999 (December 2008 Report of the Commissioner of the Environment and Sustainable Development, Chapter 1 Managing Air Emissions) We found that the Department had not assessed the sufficiency of its approach to enforcing the fuels regulations, had not completely identified the community to be regulated, and had done little to enforce the flow rate regulations for gasoline. Exhibit 3.2 Number and types of CEPA 1999 enforcement actions taken in Enforcement actions Tickets Written warnings Written directives Description Tickets are issued to the regulatees for offences where there is minimal or no threat to the environment or human life or health. Written warnings are formal written notices to inform the regulatees of a minor violation and to request corrective action. Written directives are official or authoritative instructions that oblige regulatees to take all reasonable actions to remedy any dangerous condition or to reduce any danger to the environment. Number of actions Injunctions Injunctions are actions by the Minister to stop or prevent violations of the Act. 0 Ministerial orders Environmental protection compliance orders Environmental Protection Alternative Measures Prosecutions Convictions Ministerial orders require prompt and immediate action by regulatees to prevent unlawful manufacture, importation, distribution, or sale of a substance or a product containing a substance, or to recall the substance or product from the marketplace. Environmental protection compliance orders direct violators to take the measures required to comply with the Act and associated regulations. Alternative measures for environmental protection allow for a negotiated return to compliance without a court trial. Examples include clean-up, monitoring, or changes to production. Prosecution is a legal proceeding for the purpose of determining the guilt or innocence of an accused regulatee. The number of convictions (excluding tickets) is the number of counts where the regulatee was found guilty or pleaded guilty Sources: Adapted from Environment Canada enforcement data and the Compliance and Enforcement Policy for the Canadian Environmental Protection Act, 1999 Report of the Commissioner of the Environment and Sustainable Development December 2011 Chapter 3 7

14 Focus of the audit 3.17 We examined how Environment Canada manages its environmental enforcement program to determine whether the Department adequately enforced compliance with the Canadian Environmental Protection Act, While we examined questions related to the contribution of compliance promotion activities and the enforceability of CEPA 1999 regulations, this audit focused on the management of Environment Canada s enforcement activities We assessed the management of Environment Canada s enforcement program using the Plan-Do-Check-Improve model (Exhibit 3.3). Given the cyclical nature of these management activities, our audit covered five fiscal years, from to ; we judged this period sufficient to allow for a complete management cycle Our audit work on enforcement planning and measuring performance focused on the most recent planning and reporting cycle. Our audit work on implementing enforcement plans and taking action on areas identified for improvement covered four years in order to Exhibit 3.3 Plan-Do-Check-Improve management model Plan Identify priorities and develop plans based on risk Improve Take corrective action to implement identified opportunities for improvement to ensure the achievement of program objectives Do Carry out the plans through inspections to verify and enforce compliance in a fair, predictable, and consistent manner Check Assess progress on the plans to ensure that objectives were achieved, risks were addressed, and opportunities for improvement were identified Source: Adapted from ISO 9000 series on quality management 8 Chapter 3 Report of the Commissioner of the Environment and Sustainable Development December 2011

15 allow the Department the opportunity to follow up with violators and take corrective action on identified opportunities for improvement More details about the audit objectives, scope, approach, and criteria are in About the Audit at the end of this chapter. Observations and Recommendations 3.21 Well-managed programs operate according to a systematic management cycle consisting of planning, doing, checking, and improving. In examining Environment Canada s enforcement program for the Canadian Environmental Protection Act, 1999, we looked for evidence that the program applied a risk-based approach to identify enforcement priorities and develop enforcement plans; enforcement activities were conducted in a fair, predictable, and consistent manner; progress was checked to ensure that objectives were achieved, risks addressed, and opportunities for improvement identified; and improvements were made to ensure that program objectives are achieved. Risk-based planning 3.22 Since the Canadian Environmental Protection Act, 1999 (CEPA 1999) was enacted, the number of CEPA 1999 regulations has more than doubled: from 26 when the Act was brought into force to 53 in Forty-five of these regulations have an enforcement component while eight serve to clarify various sections of the Act. According to Environment Canada, the large and growing number of regulations under CEPA 1999 has increased the challenge of gathering and maintaining information on the regulated communities, developing and providing training for enforcement officers, and allocating resources to address the greatest threats to human health and the environment There are tens of thousands of individuals, companies, and government agencies in Canada that are subject to CEPA 1999 regulations. Since it is not possible to inspect all regulatees in order to verify their compliance, a risk-based approach is essential to target Environment Canada s enforcement resources to the substances, activities, and regulatees that pose the greatest risks to human health and the environment. Report of the Commissioner of the Environment and Sustainable Development December 2011 Chapter 3 9

16 3.24 According to Environment Canada s Compliance and Enforcement Policy for the Canadian Environmental Protection Act, 1999, a number of considerations influence the selection of enforcement priorities. Importantly, the policy states that the schedule of inspections will be determined by the risk that the substance or activity presents to the environment or to human health, and by the compliance record of the individual, company or government agency. In addition, according to documentation provided by the Department, its National Enforcement Plan is based on the analysis of compliance issues and trends. We examined whether the Environmental Enforcement Directorate reviewed these risks and the compliance records of regulated individuals, companies, and government agencies as required by its policy to identify compliance issues and trends and establish its national enforcement priorities for the current year. The Environmental Enforcement Directorate uses a methodical, risk-based approach to identify enforcement priorities 3.25 To establish its enforcement priorities, the Department s Environmental Enforcement Directorate calls upon knowledgeable experts across Environment Canada to complete a planning submission form for each CEPA regulation. The form sets out a number of criteria intended to help the Directorate determine whether a regulation should be an enforcement priority. The criteria include the level of risk to the environment and human health represented by the regulated substance or activity, the compliance history of the regulated community, the visibility of the regulation or controlled substance, the availability of training for enforcement officers, and the availability of laboratory and analytical methods to determine compliance Based on these submissions and a three-day consultation with departmental experts, the Environmental Enforcement Directorate ranks regulations by level of risk to set enforcement priorities for the National Enforcement Plan for the given year The enforcement planning process for the fiscal year classified the regulations under CEPA 1999 into three categories priority, maintenance, and referral. The classification determines the level of effort that will be applied and the enforcement approach (Exhibit 3.4). Regulations classified as priority and maintenance are 10 Chapter 3 Report of the Commissioner of the Environment and Sustainable Development December 2011

17 actively enforced through inspections. Regulations classified as referrals are enforced if and when the Department receives notice about a pollution incident or a potential violation of the Act Since the planning documentation we examined did not indicate that the Directorate had ranked the 26 referral regulations by level of risk, we asked the Directorate to provide us with its reasons for classifying these regulations as referrals. The Department provided us with an explanation for each of these regulations. For example, in a number of cases, the reason provided to us was that no planning submission was received by the Directorate and that the regulation had not been identified by program managers as a consideration for enforcement. In other cases, we were told that regulations that require the regulated community to report on its activities cannot be proactively enforced. We were unable to determine whether the Directorate s rationale and reactive approach to enforcing these regulations was appropriate. Exhibit 3.4 The Department has prioritized CEPA 1999 regulations to determine the enforcement approach and assignment of resources Level of effort (percentage of available enforcement resources) Classification of the regulations Enforcement approach Number of regulations Priority Actively enforced % Maintenance Actively enforced 15 30% Referral Enforced in reaction to complaints or notification from outside the Environmental Enforcement Directorate % Source: Adapted from Environment Canada s National Enforcement Plan The Environmental Enforcement Directorate lacks key information to identify risks 3.29 CEPA 1999 empowers Environment Canada to obtain information from the regulated community on substances and activities regulated under the Act. According to the Directorate, reports from the regulated community are required for 28 CEPA regulations. These reports are essential in helping Environment Canada to identify the regulated communities for these CEPA regulations and to understand aspects of their operations such as Report of the Commissioner of the Environment and Sustainable Development December 2011 Chapter 3 11

18 volumes of substances used, emissions, or discharges. In addition, these reports are crucial because they provide the Department with more extensive information for compliance verification and enforcement planning than could practically be obtained through inspections. For example, the Benzene in Gasoline Regulations require regulatees to submit annual reports on fuel composition as well as annual audit reports on their compliance with the regulation (for more information on the enforcement of the Benzene in Gasoline Regulations, see our December 2008 Report, Chapter 1 Managing Air Emissions, paragraphs 1.16 to 1.32) We examined whether the Department had obtained the required reports from regulatees for nine regulations with regular reporting requirements that it had classified as enforcement priorities over the last five years. We found that, for six of these nine regulations, the Department did not know whether it had obtained the required reports. As a result, the Environmental Enforcement Directorate lacked key information on the activities and compliance of regulatees to determine risk and develop its National Enforcement Plan. Furthermore, failure to report is itself a regulatory violation, which means that the Directorate lacked the information it needed to know whether regulatees were complying with the reporting requirements of these regulations We also examined the planning submissions that the Environmental Enforcement Directorate received from departmental experts for the planning cycle to determine whether they addressed risks to the environment and human health and whether compliance records, issues, and trends were considered in the planning process, in accordance with the Department s enforcement policy for CEPA We found that the planning submissions contained information on the risk to the environment and human health posed by the regulated substance or activity. For example, the submission for the Export and Import of Hazardous Waste and Hazardous Recyclable Material Regulations indicates that chemicals from a number of sectors, including manufacturing, petroleum, and mining, as well as from materials such as electronics, scrap materials, and used lubricants, pose a mild to severe impact on human health and the environment. This impact depends on the size and nature of the release if the chemicals are not managed, recovered, or disposed of in an environmentally sound manner We also found that the submissions characterized overall compliance with the regulation as low, medium, or high. However, 12 Chapter 3 Report of the Commissioner of the Environment and Sustainable Development December 2011

19 given the absence of specific information on which regulated individuals, companies, or government agencies posed the greatest threats as a result of non-compliance, we asked the Department for the following information for each regulation: a list of the regulated individuals, companies, and government agencies; and a list of the regulatees that pose the greatest risk for environmental harm or damage, as a result of non-compliance In response to our request, the Department provided lists of the regulated communities for many of the regulations it plans to actively enforce. For some of the regulations, officials told us that the regulated community is small, stable, and well known to the Department, and therefore that lists of the regulated individuals, companies, and government agencies were unnecessary. However, we found considerable uncertainty within the Department about the regulated communities. For example, a quarter of the planning submissions, including those for two of the Department s four enforcement priorities, indicated that there is a large unknown number of regulatees. The planning submission for the Federal Halocarbon Regulations, 2003, for instance, indicates that the number of unknown regulatees is very large. These regulations were brought into force in 2003 and are aimed at reducing halocarbon emissions to prevent damage to the ozone layer With respect to compliance information, we found no evidence that the Directorate had analyzed compliance records to identify significant compliance issues and trends across the 45 CEPA regulations for the purpose of setting priorities in the National Enforcement Plan. The Directorate told us that it does not keep a record of the regulatees that pose the greatest risk for environmental harm or damage, as a result of non-compliance Although we found that the Directorate uses a methodical, risk-based approach to determine its enforcement priorities, the Department lacks key information to identify risks, including information reported by the regulated community and information on who is being regulated and who poses the greatest risk for environmental harm or damage. Consequently, it does not know whether its National Enforcement Plan identifies the regulatees and activities that pose the greatest risks to human health or the environment as a result of non-compliance. Report of the Commissioner of the Environment and Sustainable Development December 2011 Chapter 3 13

20 3.37 Without a clear understanding of which regulatees pose the greatest threats to human health and the environment, the Directorate cannot assure parliamentarians and Canadians that it is targeting its enforcement resources toward the highest-risk violators or fulfilling its own enforcement policy Recommendation. The Environmental Enforcement Directorate should put in place procedures to help identify regulatees and reduce uncertainty about specifically whom it is regulating under each regulation that has an enforcement component. The Department s response. Agreed. Environment Canada acknowledges that in some cases it would be beneficial to establish procedures to systematically maintain accurate and up-to-date lists of the regulated parties. It is important to emphasize, however, that it is neither necessary nor feasible to always maintain a comprehensive list of all regulated parties. For example, regulated communities are not always completely inventoried for new regulations. The departmental approach is to progressively build knowledge of the regulated community by targeting larger companies first and then further identifying smaller and more dispersed ones. This incremental approach has proven to be a cost-effective method to identify regulatees for compliance promotion and enforcement purposes. The Department does not agree with the report s conclusion that key information on regulatees is missing and that, as a result, the Department s ability to target its enforcement activity to highest risk offenders is hindered. Environment Canada s existing practices maintain an appropriate level of information on its regulated communities drawn from a number of sources which varies depending on the nature of the regulation. The Department will continue to improve its processes for updating relevant information about regulatees on a regular and consistent basis as part of the updating of Compliance Strategies and the annual Compliance Priority Planning Process Recommendation. The Environmental Enforcement Directorate should obtain and analyze information on compliance issues and trends to establish priorities in its National Enforcement Plan and ensure that it is targeting its enforcement resources toward the individuals, companies, and government agencies that pose the greatest threats to the environment and human health. 14 Chapter 3 Report of the Commissioner of the Environment and Sustainable Development December 2011

21 The Department s response. Agreed. The Department employs a rigorous risk-based approach to enforcement planning, where threats and risks to the environment and human health are factors in priority decision making, as was noted in the audit. Priority setting for the enforcement of the Canadian Environmental Protection Act, 1999 draws on knowledge and expertise at both the national and regional levels. Once national priorities for compliance verification have been established, regions undertake local targeting, where compliance histories are considered by operational managers and inspectors in developing local plans. Environment Canada agrees, however, that the CEPA enforcement planning process could benefit from information drawn from a more systematic approach to compliance trends analysis where feasible. In order to further improve the existing national risk-based CEPA enforcement planning process, where it is feasible, practical, and beneficial, Environment Canada will analyze existing compliance information and will produce sectoral compliance rate statistics for selected sectors to aid in priority setting and track compliance results over time. Lack of training and laboratory testing methods limit enforcement 3.40 In setting its enforcement priorities, the Environmental Enforcement Directorate considers a number of factors, including risk to human health and the environment (see paragraph 3.25). Regardless of these risks, it excludes from its enforcement priorities those regulations for which the needed specialized training or laboratory testing methods have not been developed According to the Directorate, 30 of the 45 CEPA regulations with an enforcement component require specialized training because of their complexity. There was no training course in place for 16 of these regulations. Five that require a laboratory test to enforce the regulation did not have one available (Exhibit 3.5). The Department needs to lay the foundation for effective enforcement by ensuring these basic requirements are in place before new regulations are brought into force (see our recommendation at paragraph 3.71) We found that enforcement priorities are determined primarily on the basis of the Department s capacity to enforce the regulations. Management told us that the large and growing number of regulations under CEPA 1999 has increased the challenge of developing and providing training in a timely manner. Report of the Commissioner of the Environment and Sustainable Development December 2011 Chapter 3 15

22 Exhibit 3.5 For some CEPA 1999 regulations with high levels of risk, the Department does not have the training or laboratory tests needed for enforcement 2-Butoxyethanol Regulations 2-Butoxyethanol (2-BE) is a toxic substance regulated under the Canadian Environmental Protection Act, 1999, because it poses a danger to human life and health. It is used in a wide range of consumer and institutional products, such as cleaners, paints, and coatings, which are routinely used in schools and hospitals. The 2-BE regulations aim to limit the concentration of this substance in products designed for indoor use to reduce human exposure to below potentially harmful levels. The enforcement plan for this regulation included conducting inspections with sampling of regulated products and reviewing documents related to the ingredients of those products. In the planning process, the Department determined that non-compliance with this regulation poses a high risk to human health. The Department s list of the regulated community indicates that there are 214 regulatees. Despite the fact that these regulations have been in force since December 2007 (for manufacturers and importers) and December 2008 (for sellers), the laboratory test needed to enforce this regulation was developed in late 2010, and is unaccredited in some provinces. The Environmental Enforcement Directorate has conducted three inspections since this regulation came into force. Perfluorooctane Sulfonate and its Salts and Certain Other Compounds Regulations Perfluorooctane Sulfonate (PFOS) substances are considered toxic under the Act because they pose serious, irreversible impacts through bioaccumulation and persistence in the environment. In Canada, PFOS has been detected in species such as fish, fish-eating birds, and Arctic marine mammals far from known sources. The effects of PFOS include inhibiting the growth of birds and aquatic invertebrates, causing liver and thyroid effects in mammals, killing fish and saltwater invertebrates, and changing biodiversity. PFOS releases have also been found to cause groundwater contamination up to five years after its release. The PFOS regulations aim to achieve the lowest level of releases to the environment that is technically and economically feasible. PFOS is used in the metal plating sector and as a component of foams used for firefighting. It may also be contained in imported items such as water, oil, soil and grease repellents (for example, on fabric, leather, paper, packaging, rugs and carpets) and as surfactants (for example, coating additives). Despite the voluntary phase-out of PFOS production by major global manufacturers, the Department was concerned about the compliance of imported clothing. Enforcement costs were expected to amount to approximately $570,450 over a 25-year time frame, including between $56,220 and $74,316 per year for the first five years. In the planning process, the Department determined that non-compliance with this regulation poses a high risk to the environment. The Department s list of the regulated community indicates that there are 414 regulatees. However, the planning submission from Environment Canada experts also indicated that there is a high number of unknown regulatees. While this regulation came into force in May 2008, two inspections have been conducted to date. The Department has indicated that the training and laboratory support needed to enforce this regulation is not yet in place. 16 Chapter 3 Report of the Commissioner of the Environment and Sustainable Development December 2011

23 Enforcing the Act Fair, predictable, and consistent enforcement of the Act is not assured 3.43 According to the Canadian Environmental Protection Act, 1999 (CEPA 1999) and Environment Canada s Compliance and Enforcement Policy for CEPA 1999, enforcement officers throughout Canada must apply the Act in a manner that is fair, predictable, and consistent. Lack of fairness, predictability, and consistency in applying the Act across the Environmental Enforcement Directorate s five regions could potentially create pollution havens in various regions of the country or affect the outcome of future litigation The Compliance and Enforcement Policy sets out the enforcement actions available to enforcement officers, such as warnings, directions, tickets, compliance orders, and injunctions; establishes criteria for choosing the appropriate action; and calls for follow-up to verify adherence to past enforcement actions and to verify that the regulatee has returned to compliance. In addition, the policy states that the desired result of enforcement activities is compliance with the Act within the shortest possible time and with no further occurrence of violation. Consistent and predictable use of enforcement actions and follow-up are keys to fairness in enforcing the law The enforcement program has developed an Internal Decision Making Process, which consists of management controls intended to ensure fair, predictable, and consistent enforcement of the Act across Canada. The enforcement program has also created standards that require enforcement officers and managers to record their enforcement activities and approvals in the National Emergency and Enforcement Management Information System and Intelligence System (NEMISIS). Developed in 1998, NEMISIS is intended to contain the Department s record of pollution occurrences, inspections, investigations, and enforcement actions. We confirmed with management that NEMISIS is the Department s core repository for enforcement activities We examined representative samples of the Directorate s NEMISIS enforcement files to determine whether the Directorate applied key management controls from its Internal Decision Making Process to ensure that enforcement actions are applied in a fair, predictable, and consistent manner. We selected two key management controls that were both in place throughout the audit period and were mandatory requirements. Report of the Commissioner of the Environment and Sustainable Development December 2011 Chapter 3 17

24 Environmental protection compliance orders Orders that direct alleged violators to take the measures required to comply with the Canadian Environmental Protection Act, 1999 and associated regulations. While the order imposes no financial or other penalty, failure to comply with the order is a prosecutable offence To ensure a consistent approach to enforcement in situations where a violation did not result in an enforcement action such as a warning or a ticket, the Department requires that management approve the closure of the file. In 40 percent of the 1,076 files, we found no evidence that this control had been applied. Enforcement officers are also required under the Internal Decision Making Process to obtain management approval prior to issuing environmental protection compliance orders (EPCO). In about 25 percent of the 107 EPCOs issued, we found no evidence that the necessary management approvals were obtained In addition, we examined whether the Directorate had complied with its enforcement policy to follow up with violators to verify that they had returned to compliance. Management told us that it applied a risk-based approach to follow up and that a follow-up inspection was not always warranted. Nevertheless, management confirmed that there should be some record in NEMISIS, such as a record of a telephone call or an , to confirm that the enforcement officer verified a return to compliance In half of all cases, we found no evidence that enforcement officers followed up. In those cases where the Directorate confirmed a return to compliance, an average of approximately 300 days had elapsed since the enforcement action. Although the Department s enforcement policy is to ensure compliance with the Act within the shortest possible time and with no further occurrence of violation, the Directorate has no set time frame for this activity Recommendation. The Environmental Enforcement Directorate should apply its key controls to ensure that enforcement actions are conducted in a manner that is fair, predictable, and consistent across its five regional offices in accordance with CEPA The Department s response. Agreed. The Environmental Enforcement Directorate agrees that the management controls identified in the audit, data entry and record keeping for enforcement actions need to be improved and will ensure that they conform to its Internal Decision Making Process, with a particular emphasis on better documenting management approvals of enforcement actions by Winter The Department does not agree that weaknesses in these management controls affect its ability to ensure the fair, predictable and consistent enforcement of CEPA. There are legal, structural and programmatic checks and approvals within the CEPA framework in addition to the management controls examined in the audit that ensure fairness and 18 Chapter 3 Report of the Commissioner of the Environment and Sustainable Development December 2011

25 consistency. Officers receive training on the use of tools such as Environmental Protection Compliance Orders (EPCO): prior to the issuance of an EPCO, officers serve a Notice of Intent, providing the regulatee an opportunity to make representations; the Department of Justice assists in the drafting of the order to ensure measures chosen are appropriate and supportable in law; and, regulatees may appeal an order to an independent quasi-judicial authority, the CEPA Chief Review Officer (CRO). Between to , 107 EPCOs were issued. Only 3 were appealed to the CRO. Two were upheld, with the third CRO ruling in favour of the regulatee. The Crown appealed that ruling to Federal Court, where the original EPCO was upheld and reinstated. The findings demonstrate that the system as a whole is functioning well. Additional resources have not resulted in more enforcement activity 3.51 We reviewed the Department s enforcement activities since the fiscal year, when additional funds were approved for the Department to hire 68 environmental enforcement officers. Environment Canada expected that the additional enforcement resources would lead to an increase in the number of inspections for some CEPA 1999 regulations We found that the additional enforcement resources had not yet had the intended effect on the number of inspections (Exhibit 3.6). In addition, the Directorate was unable to tell us how many of the 40 full-time-equivalent positions added since 2007 are environmental enforcement officers. Exhibit 3.6 Additional resources have not led to more CEPA 1999 inspections Inspections Years Source: Data on inspections adapted from CEPA 1999 annual reports Report of the Commissioner of the Environment and Sustainable Development December 2011 Chapter 3 19